Sri. R.K. Talwar(1922-2002) was a legendary Banker. He was widely known and
respected for his honesty and uprightness.In 1981, when I was undergoing 2nd Branch
training as a PO at Pondicherry, I had the good fortune of meeting him. He had no
airs about him. He asked me how I liked the Bank job and wished me success in my career.

He was an ardent devotee of Sri. Aurobindo and The Mother. He passed away in
Pondicherry in 2002.

These Webpages aim to collect and present impressions of Sri.. Talwar at a
single place.

Contributions from persons knowing Sri. Talwar, having his photographs or any written
material welcome. Copies only need be sent. Archival material like old issues of
Colleague, any other Circle House Magazines having articles by/on him may also be
sent. Persons having photographs can also send them by scanning them as .jpeg files

"HONESTY IS the best protection'' is the message that greets everyone in the lift
lobbies of the Mumbai Corporate Office of State Bank of India. It was painted at the
instance of R. K. Talwar, (RKT) who was the Chairman of the bank at the time the building
was commissioned. RKT adopted honesty as an abiding principle of his life, but was wise to
recognise that many others would try to be honest only if it were a protection and not
policy. In his passing away, the country and its banking system has lost a titan.

RKT presided over the destiny of SBI during a truly historic moment in Indian banking.
Until 1969, SBI was the only bank owned by the Government and had enjoyed a unique status
in the minds of people; it was the biggest of them all. By the nationalisation of 14 other
big banks in 1969, the uniqueness of SBI was eroded and the other banks offered stiff
competition to SBI. By his foresighted and value-based leadership  he was the
Chairman till 1976  RKT placed SBI in such an unassailable position that it holds
the top position even 25 years after he left the bank. The true measure of this
achievement could be understood if one were to compare the progress of the other big
banks; the biggest private sector bank, just before nationalisation, has been now shunted
to a far lower place in the pecking order and the position of No. 2 bank after SBI is
constantly changing.

In any mention about RKT, his steadfast faith in wholesome values would come on top.
Two instances come to mind. When it was indicated in one of the advertisements of SBI that
it was safe to bank with the bank, a competitor complained that it might give the
impression that other banks are unsafe institutions; RKT immediately appreciated the point
and ordered the withdrawal of the advertisement. Another was during the mid-1980s, when
the then Chairman of the bank was talking to a leading international banker in a foreign
country. The SBI Chairman was not sure whether the foreigner had heard of SBI: the latter
put the former at ease, saying that he well knew of SBI, as the biggest Indian bank,
"that can do no wrong". This compliment was earned by SBI only because of the
legacy left behind by RKT.

RKT's foresight was exceptional. It was he who saw that the organisational structure
and systems of the bank needed a thorough overhaul in 1970 and commissioned consultants to
study the matter and suggest suitable corrective action. This was particularly needed as
SBI's network of branches grew in geometric proportions from around 250 in 1955 (with a
150 years existence) to 650 in 1960 and over 8,000 in the next 20 years. He chose two
brilliant academicians from the Indian Institute of Management, Ahmedabad, as consultants,
in preference to foreign firms. His main brief to them was that the bank had "lost
its branch managers and they have to be brought back to the main stream.'' That he, as
Chairman, could empathise with the front line staff speaks volumes of his commitment to
the organisation. The reorganised structure that he put in place had verily stood the test
of time and, but for some modifications, was in place for well over two decades.

Men of vision are generally uncomfortable poring over details and usually leave the
tiresome job to their glorified assistants. Not so, RKT. He was totally comfortable with
detailed analyses of any complex problem and would go to the core of the issue
immediately. And, the best part of it was that any formidable office note did not stay in
his table overnight. The imprint of his incisive brain was quite visible in the perceptive
comments that he made on the note. He was truly a man who clearly "saw both the trees
and the whole forest.''

RKT was also readily accessible to all the people working in the bank and he did not
take offence at certain remarks at which lesser mortals would have taken serious
exception. An instance was when he visited the bank's staff college in Hyderabad and
addressed a gathering of newly recruited probationary officers. One impish officer asked
him as to what qualities made him Chairman of the bank. RKT politely replied that there
was nothing extraordinary in him, but devotion to duty and the blessings of the Divine.

RKT trusted people and groomed all those working under him to shoulder higher
responsibilities. He used to tell his trusted subordinates that they could well exercise
up to his powers, in an emergency and report to him for ratification later. Even if the
decision taken by the subordinate proved to be wrong, RKT stood by the decision. By
demanding perfection from his people, RKT ensured that they became professionally strong.

In business development, RKT's contribution was phenomenal. He joined the then Imperial
Bank in the 1940s when the bank gave loans only to the "reputed'' business houses in
the country and little, if any, scrutiny of the client's financials and other factors was
done.

He insisted on proper examination of the factual financial position of all the big
borrowers and did not go by their mere connections or past reputation. Much before the
Tandon Committee prescribed norms for financial analysis of big borrowers, at the instance
of RKT, systems were in place in SBI to ensure that the bank's funds were put to proper
use. In fact, almost alone among his peers then, RKT was quite comfortable with studying
in depth, financial data of borrowers.

Lest one conclude that RKT was pro big business, it has to be recorded that it was he
who was instrumental in giving a big thrust to financing small scale industries and
businesses. He chaired a committee in the 1960s which recommended far reaching changes in
the way SBI (or for that matter any other bank in India) gave loans to the smaller
entrepreneurs. SBI, under RKT's leadership, proclaimed that "any activity that can
produce salable goods'' can and should be supported with need-based bank finance. It was a
severe cultural change from security based lending to need based lending and but for RKT's
missionary zeal in promoting the cause of smaller units, it is doubtful if SBI would have
assimilated the policy and implemented it.

Above all, he had the courage of his convictions and did not succumb to unreasonable
pressures from external sources. On one occasion, he pleaded in the Chairman's speech in
the annual meeting of SBI for increasing the interest rates on deposits, during a time
when these were fully dictated by the Reserve Bank of India, which is the central bank of
the country, besides being the owner of SBI. He insisted on doing so, despite a clear
signal that the RBI Governor would like the matter to be deleted from the speech.

The final denouement came when the powers that be in New Delhi ordered him orally to
give more money to an already sick borrower. As "obeying'' that order would have put
SBI's funds in jeopardy, RKT refused, point blank, and it is recorded history that this
decision of his cost him his job as Chairman of SBI . India would rarely see the likes of
him who, at a fairly young age of 54, gave up the biggest job in commercial banking, to
uphold a principle.

An ardent devotee of Sage Aurobindo and the Mother, RKT was fully committed in words
and deeds to truth and honesty. Raj Kumar Talwar was not a mere prince, but a mighty
Emperor among honourable men. May his soul rest in peace.

CHENNAI APRIL 25. A super banker of yester-year with a clear fix on tomorrow. That was
R.K. Talwar. The former Chairman of State Bank of India may have passed into the pages of
history. Yet, his contributions, nay works, at SBI hold a lesson or two to young bankers
of the coming generations. The introduction of organisational reforms and innovative
banking in the 70s had brought out the visionary in Talwar. If the organisational revamp
had underscored his concern for making banking a lot more creative activity, his concept
of innovative banking had always in mind a proper blend of business goal and social
obligations. Not surprisingly, SBI, during his tenure at the helm, was making some
unorthodox lending such as financing prisoners, rehabilitation of ex-convicts, helping
industrial workers to buy bicycles and the like. More than anyone, Chennaites will cherish
his memory more. At a young age, Talwar was vested with the job of Deputy Secretary and
Treasurer to Madras Circle. The five-year stay in Chennai saw him take the circle to the
top in SSI lending. For Talwar, "small man'' had become some sort of on obsession. So
much so, he was often referred to as "Saviour of SSIs,'' "Father of SSI
movement'' and what not. He was singularly responsible for establishment of the merchant
banking division in SBI. His `emotional involvement' with small units had forced him to
direct this division to help grown SSIs graduate to next phase. Talwar laid much store by
sound lending. Availability of security - even in the form of Government uarantee - in his
reckoning, should never deviate a banker from the principles of sound lending.

Talwar always sought only a supplementary role for banks vis-a-vis assisting the farm
sector. On several occasions, he had made it plain that the primary role still belonged to
the co-operative sector. Unlike the new generation banker who does not hesitate to pull
out of a firm at the first sight of trouble, Mr. Talwar had always held that it was the
primary responsibility of the banker to identify the trouble and nurse a unit out of
sickness.

THE passing away of R. K. Talwar marks the end of a distinct era in Indian banking. The
Hindu notes that he was the `Father of SSI (Small Scale Industries)'. But Talwar's
contributions to the banking industry cannot be limited to SSIs. The impact he made was
more sweeping, had become the benchmark of the banking industry's coming of age in the
1960s and the 1970s.

The business world is familiar with Talwar's important role in the flow of bank credit
to SSIs; but less known is the fact that he brought about a sea change in the attitude of
the banking system to SSIs. The banking system in the 1960s was filled with primitive
attitudes to managerial accountability. Talwar saw this as a major barrier to the
development of SSIs through banking support and boldly came out with the decision that, in
the area of SSI financing, so long as the officers/managers were not guilty of mala fides,
and so long as the appraisal of the credit was in order, the officers/managers would not
be held accountable for errors of judgment. The result was amazing. SBI's performance in
the development sector of credit was leagues ahead of all the other banks.

Talwar laid great stress on proper and comprehensive credit appraisal. The beginnings
of a credit rating system were also founded through his initiatives. He asked the credit
officers to make unambiguous recommendations. Fairly convinced that the appraisal system
was the best safety net he could think of, Talwar astonished the corporate world by
offering to surrender guarantees of managing agents and/or directors in lieu of a fair
readjusting (upwards) of the lending rate.

Another important area in which Talwar's innovative approach fetched profitable results
for SBI was the issue of pricing of products and services. Until the early 1970s, there
was no scientific basis in SBI for pricing products and services. For instance, the rate
of exchange (commission) for discounting a trade bill or a cheque and for collecting the
same instrument was the same.

The fee structure completely overlooked the fact that while discounting an instrument,
the bank was laying down funds upfront and while collecting the same instrument, the bank
was enjoying the float  the very opposite. Talwar introduced more rational and
rigorous pricing models and attitudes. These sweeping changes did not spare even the
Government. SBI was then the sole agent of the RBI for conducting the treasury business of
the Central and State governments. For this service, the RBI paid a compensation that did
not meet even a fraction of the cost. Talwar raised this issue with the RBI and persuaded
it to accept a third party assessment. Thakur, a leading private chartered accountant (who
was to become a Minster of State for Finance in later years), was appointed for this
purpose. As a result, the structure of compensation for SBI for conducting government
business was placed on a rational footing.

When human resource development was still a relatively unknown management jargon,
Talwar propagated the idea of human and social capital. He took personal interest in
officers who he thought had the potential to grow fast; he called them for discussions,
often over the heads of their superiors who were also involved in the matters discussed.

Talwar's tenure as SBI Chairman was also coincidentally a period when the trade union
movement was getting to be aggressive and confrontational. This was particularly true of
the unions in the banking system. The bank saw quite a few confrontations, strikes and
agitations, as a consequence.

Talwar's equations with the RBI were always excellent. Because of his strikingly
original and thought-provoking policy insights, he was always consulted by the RBI's top
brass when it formulated important banking policy. Talwar was the SBI's first technocrat
Chairman. Prior to him, SBI/IBI Chairmen were invariably appointed either from the ICS/IAS
cadre or from the top management of the RBI. He, therefore, had to prove himself and
demonstrate the stuff of which bank managers were made of.

He retired with his wife to Sri Aurobindo Ashram to lead a simple and quiet life. When
the Ashram was getting to be a bit uncomfortable with internal squabbles, he moved out to
a small sparse portion in a street house in Pondicherry.

(The author, a former managing director of SBI's Overseas Operations, is now adviser to
Apeejay Group of companies.)

The article on the late R. K. Talwar, `A banker ahead of his times' (Business Line, May
7,2002) brings out clearly why Talwar was a much-admired figure in the banking circles.

The article does not, however, touch upon one important aspect of his personality.

Besides being a man of character and integrity, Talwar did not yield to political
pressure and did not hesitate to give up his positions as Chairman of State Bank of India
and, later, as Chairman of Industrial Development Bank of India when he could not agree to
certain courses of action on the basis of his conscience.

I recall Talwar (in 1988) not showing any interest in giving the RBI his bio-data so
that he could be considered for appointment to its central board.

Perhaps he came to the conclusion that he may not be able to perform his duties on the
board of the RBI with the fierce independence with which he was used to performing his
duties.

All those really interested in the subject of autonomy of the central bank should note
this.